Spanish tax authorities raid Google offices in Madrid

Google has said it has complied with the fiscal law in Spain.

Tax authorities in Spain have raided Google's Madrid offices on 30 June as part of an investigation into the company's tax payments.

A spokesperson for Google told Reuters that the company had complied with fiscal legislation in Spain like it did in other countries where it operates. The company was working with the tax authorities to answer all questions raised by them, the spokesperson said. According to a statement by the Madrid High Court, the raid had been approved by a court following requests from Spanish tax authorities.

The state financial prosecutor in a statement had said, "These searches form part of a preliminary enquiry opened on 16 June 2015 relating to acts of aggravated financial fraud and organised laundering of aggravated financial fraud, following a complaint from the French tax authorities."

The French prosecutors wanted to establish whether the Irish company, Google Ireland Limited, through which Google funnels a lion's share of its European revenue, controls a permanent establishment in France.

Google claims its offices in Paris and London are not fully fledged businesses, but operate as satellites of its headquarters in Dublin, states a report by the Guardian. The internet giant pays a majority of its revenue through Dublin, where the 12.5% corporation tax rate is low by European standards. This structure allows the company to avoid European and US taxes.

In January, Google agreed to pay £130m in back taxes after it reached an agreement with the UK tax authorities. It further promised to adopt a new approach for UK taxes and settlement that covers taxes from 2005-2015.